Tuesday, December 3, 2013

Parliament of South Africa: 29 November 2013 The export ban of South Africa`s citrus products from the European Union markets is a major concern and poses a threat to socio-economic development in the country, according to the Portfolio Committee on Agriculture, Forestry and Fisheries.

This follows the alleged reports about the citrus black spot that was found in several citrus fruit cargos from South Africa to European markets this year which led to sudden decision by the European authorities to put immediate restrictions on the country’s citrus exports from certain identified regions. This has since been described as a serious threat to European producers and compromises their citrus industry.

The Committee is calling for urgent closer cooperation between the South African government and their European counterparts to further discuss the issue on scientific evidence and reconsider the decision while working in collaboration with the affected citrus producers in the industry to take proper control measures to ensure disease-free in the identified regions.

According to the Committee Chairperson, Mr Lulu Johnson, this untimely decision has the potential to impact negatively on the industry in terms of both the income and job losses. “As much as we believe that each party has the obligation to act in the best for its economy, as the Committee we strongly believe that it is through the continuous negotiations that an amicable solution favourable to both countries, especially their producers and consumers, can be found before this causes more unexpected harm,” said Mr Johnson.

The Committee encourages the department, together with the Perishable Products Export Control Board (PPECB), to find a way of eliminating the possible development of the citrus black spot, and equally appeal to the EU to open doors for negotiations.

Monday, November 25, 2013

The Republic of South Africa has priced a US$2 billion 12-year global bond in the
international capital markets. The bond was priced at a coupon (interest) rate of 5.875 per
cent, 315 basis points above the 10- year US Treasury’s benchmark bond.

The transaction attracted bids to the value of US$7.4 billion, more than 3.5 times
oversubscribed. The demand was mainly from investors out of Europe and the United
States. This deal is printed against a difficult global backdrop characterised by rising yields
and widening spreads.

Thursday, November 21, 2013

The Ethiopian
Government launched a programme for the privatisation of state owned
enterprises in early 1995. Accordingly, the Ethiopian Privatization Agency
(EPA) was established to implement the privatisation programme in the same
year. The Government has laid the ground to privatise most of the state owned
enterprises to the private sector. Accordingly, EPA has received a stock of 113
state owned enterprises from the government for privatisation in the years
ahead. As indicated in EPA's work schedule, out of these enterprises, a total
of 43 state owned enterprises are in the pipeline for privatisation in the near
future. Most of these enterprises fall under manufacturing, construction,
agriculture and agro-industry, hotels, transport, trade, and mining sectors.
There is a strong commitment from the Government side to fully privatise state
enterprises in the coming in few years. Detailed information on the process of
privatisation can be obtained from the Ethiopian Privatization Agency.

Agriculture
Agriculture is the main stay of Ethiopia's economy providing employment to 85
per cent of the population. The sector contributes about 45 per cent of the GDP
and 62 per cent of total exports with coffee alone accounting 39. 4 per cent of
total exports in 2001/2002. Furthermore, agriculture plays a crucial role in
providing raw material inputs for the local industry. Endowed with wide ranging
agro-ecological zones and diversified resources, Ethiopia grows all types of
cereals, fiber crops, oil seeds, coffee, tea, flowers, fruits and vegetables.
The potentially irrigable land is estimated at 10 million hectares. Ethiopia
has the largest livestock population in Africa. Fishery and forestry resources
are also significant. Considerable opportunities exist for new private
investment in the production and processing of the above agricultural crops and
resources. The following areas in particular, have been identified to offer
plenty of opportunities to private investors.

Food Crops

The food crops grown
include teff, wheat, maize, beans, peas, lentils, soyabeans, chickpeas etc. In
1992/2000, Ethiopia produced 11.4 million tons of these food crops on about 8.9
million hectares of land. This is far short of the country's demand for these
crops. Great opportunities, therefore, exist for commercial production and
processing of these food crops. Some pulses can also be produced or processed
for the export market. Oil crops such as rapeseed, linseed, groundnuts,
sunflower, ginger seed and cottonseed serve as raw material inputs for the
edible oil industry. Some oilseeds, including sesame, are important export
crops. Favorable agro- climatic conditions also exist in the south-western
parts of the country for introducing coconut for the production and processing
of palm oil and ghee. Besides, Ethiopia has a huge potential for producing and
processing of maize. It is widely grown in various agro-ecological zones. The
total annual average production is 250 thousand metric tones in an area of about
1.4 million hectares. As part of the government's initiative to efficiently tap
the available potential, detailed project profiles have already been prepared
for the processing of coffee and corn.

Beverage Crops

Coffee is Ethiopia's
gift to the world. The country is Africa's leading producer of Coffee Arabica.
Coffee remains the single most important cash crop. The volume of coffee export
was just over 110 thousand tons in 2001/2002. The potential for private
production and processing of coffee is significant. Tea is also another
potential for production, processing and export. Ethiopia's tea is of an
excellent quality. The total tea export for the year 2001/02 was 153 tons. The
favourable agro-climatic conditions in the country offer excellent opportunities
for production and processing of tea for both export and domestic consumption.

Cotton

Cotton provides
significant opportunities for export. A portion of existing textile industry
demand of lint cotton is met from domestic production, the remaining being met
through imports. In addition, there are good prospects for exporting lint.
Opportunities for production and processing of cotton in Ethiopia are
significant.

Horticulture

Ethiopia's
diversified agro-climatic conditions makes it suitable for the production of a
broad range of fruits, vegetables and flowers, including citrus, banana, mango,
papaya, avocado, guava, grapes, pineapple, passion fruit, apples, potatoes,
cabbages cauliflower, okra, egg plant, tomato, celery, cucumber, pepper, onion,
asparagus, water melon, sweet melon, carrots, green beans and cut flowers.
Ethiopia is believed to be center of diversity and center of origin for various
flowering plants. Cut flower and vegetable production are fast growing export
businesses; in 2001/02-production year over 29,000 tons of fruits and
vegetables and 10 tons of flowers were exported. The agro-processing of fruits
and vegetables can be vertically integrated with production. There are already
some integrated agro-industrial processing plants run by a state enterprise.
The horticulture sub-sector in general holds great potential for private
investment.

Livestock

Ethiopia is one of
the top ranking countries in Africa and among the first ten in the world in
terms of livestock resource. The livestock resources of the country include 35
million cattle, 11.4 million sheep and 9.6 million goats. Traditional methods
of animal husbandry render current output per unit of domestic breed of
livestock too low. Therefore, investment opportunities are potentially attractive
for modern commercial livestock breeding, production and processing of meat,
milk and eggs. Investment opportunities of significance potential are also
available in ostrich, civet cat and crocodile farming.

Fishery

Opportunities exist
for fresh water fish production and processing using artificial ponds. In
addition, the country's fresh water bodies have an estimated annual fish
production capacity of 30,000-40,000 tons, of which less than ten per cent is
presently being exploited.

Forestry and Apiculture

An estimated 2.5
million hectares of natural forest presently remains in 58 designated National
Forest Priority Areas (NFPA). Of these, 13 are managed under integrated forest
management systems, with about 80,000 hectares of industrial forest having been
established for limited sustainable exploitation. Investors are welcome to
invest in integrated commercial production of structural timber, pulp-wood,
match wood or even fuel wood. Production of rubber and natural gum also offers
exciting opportunities for private investment. With some 3.3 million beehives,
Ethiopia is the leading honey and bees wax producing and exporting nation in
Africa. This offers excellent prospects for private investment in
apiculture.

Manufacturing is now
at an early stage of development, and currently accounts for about 7 per cent
of GDP and 5.3% of employment. It covers about 145 state owned and 643 private
manufacturing industries of all sizes. These industries are mainly engaged in
the production of food products and beverages, tobacco products, textiles,
wearing apparel, tanning and dressing of leather, footwear, luggage and
handbags, manufacturing of wood and its products, manufacturing of rubber and
plastic products, manufacturing of chemicals and chemical products, manufacturing
of other non-metallic mineral products, manufacturing of basic iron and steel,
manufacturing of fabricated metal products, assembling of motor vehicles,
trailers and semi trailers . As part of the government effort to re invigorates
and revitalize the manufacturing sector, a new Industrialization Development
Strategy has recently been adopted. The Strategy clearly identifies the
priority areas of the manufacturing sub-sectors and put in place strategies
that insure the development of vibrant industries in the country. Major
manufacturing opportunities offering attractive potential benefits to
prospective investors exist in the textile and garment, food and beverage,
leather and electronic, building materials and non-metallic mineral and
metallic industrial sub-sectors. These investment opportunities include:

Food and Beverages: processing and
preserving of meat products; integrated production, processing and
preserving of fish and fish products; processing and preserving of fruits
and vegetables; integrated production and processing of dairy products;
manufacture of sugar; brewery, winery, soft drinks, processing and
bottling of mineral water, etc.

Ethiopia offers
excellent opportunities for mineral prospecting and development. According to
the Ministry of Mines and Energy, "Ethiopia's green stone belts offer one
of the finest areas for gold mineralization any where in the world," and
already more than 500 metric tons of gold deposits have been identified by
Government exploration efforts. Additional gold reserves are expected to be
identified in at least seven regions of the country.

In addition to gold,
Ethiopia is blessed with good deposits of tantalum, platinum, nickel, potash
and soda ash. Included in the construction and industrial minerals are marble,
granite, limestone, clay, gypsum, gemstone, iron ore, coal, copper, silica,
diatomite, bentonite, etc. With regard to fossil energy resources, there are
significant opportunities for oil and natural gas in the four major sedimentary
basins, namely the Ogaden, the Gambella, the Blue Nile and the Southern Rift
Valley. Details of the mineral resources have been published by the Ministry of
Mines in two volume prospectus.

Tourism

Tourists and writers
who have been to Ethiopia wonder why Ethiopia's tourism potential is still so
little known. According to December 12,2002 edition of Our World, "Those
who have discovered Ethiopia would probably like to keep the secret to
themselves." In any case, the message is starting to filter through.
Tourism in Ethiopia is growing slowly but surely.

The country has a lot
to offer to tourists. Visitors will find landscapes comparable to its
neighbouring countries, Kenya or Tanzania, and awe-inspiring historical sites
and monuments similar to its other neighbour, Egypt.

The highlands of
Ethiopia have an attractive landscape, scenery and wildlife. In the African
Rift Valley system, a wide variety of wildlife and numerous bird species, both
endemic and common, are found and a substantial volume of traffic is directed
to this area. The magnificent Tis Issat Falls on the Blue Nile (Abay) river the
endemic wildlife in Semien Mountains, the Sof Omar Cave in the south east are
some of the interesting sites. The rock-hewn churches at Lalibela, the ancient
buildings of Yeha and the obelisks at Axum, the medieval palaces at Gondar and
the monasteries of Lake Tana, Debre Damo aand Debre Libanos are the main
tourist attractions.

Given its unique
cultural heritage, magnificent scenery, pleasant climate, rich flora and fauna,
important archaeological sites, friendly and hospitable people and the recent
growth in the inflow of tourists, Ethiopia's potential puts it among the
leading tourist destinations in Africa. Tourism infrastructure, which is still
inadequate, should be developed in order to cope with the growing traffic.
There are, therefore, great opportunities for private investment in hotels, lodges
and international restaurants.

The Primary Dealers in fixed rate government bonds of the Republic of South Africa are
required to constantly improve liquidity in the secondary market by quoting a two-way
price on the bonds that have an outstanding amount of R10 billion and more.

The outstanding amount on the R2037 (8.50%: 2037) bond has reached the R10 billion
mark and consequently, Primary Dealers are obliged to quote a two-way price on this
bond as stipulated in the rules of the Primary Dealers in fixed rate government bonds of
the Republic of South Africa.

The R2037 (8.50%: 2037) bond should be quoted at a maximum bid-offer spread of
10 basis points and a minimum amount of R10 million between Primary Dealers and
other market participants.

Thursday, November 14, 2013

Following his 2013 Budget announcement, the Minister of Finance publicised the members
of a tax review committee on 17 July 2013. The committee, now known as the Davis Tax
Committee (DTC), will examine the role of South Africa’s tax system to promote growth, job
creation, sustainable development and fiscal self-reliance. It will take the long term
objectives of the National Development Plan into account in its work.

Using its Terms of Reference as the point of departure, the DTC has adopted a work
programme that has prioritised the establishment of specialist sub-committees on small
businesses, the appropriateness of the tax base and tax mix in South Africa, and base
erosion and profit shifting (BEPS).

The DTC has also adopted an approach that is participatory and consultative. This will
provide for wide engagement with all stakeholders. Special dialogue sessions are arranged
on an ongoing basis to take into account a diversity of interests and opinions. The DTC
accordingly calls upon all interested parties to make use of the opportunity to contribute to
the mentioned priorities for now.

Top priority of the DTC at the moment is to address ways in which the tax system can be
improved to facilitate entrepreneurship and the growth of small businesses. Various tax
packages already exist to encourage small businesses. The DTC needs to review these
packages to find an optimal tax package that assists small businesses in contributing towards
economic growth and reducing the high unemployment rate. Urgent contributions in this
regard will be most welcome by 20 November 2013.

Contributions with regard to the tax burden and tax mix are invited by 30 November 2013.
The BEPS Sub-Committee is working on a longer timeframe that is aligned with the OECD
BEPS Action Plan. Contributions with regard to BEPS are welcome by 31 January 2014.

All contributions can be made via e-mail to taxcom@sars.gov.za . More details on the work
of the DTC and its Terms of Reference can be found on its website, www.taxcom.org.za

Wednesday, November 13, 2013

Addis Ababa, Ethiopia, 31 October 2013 – IFC, a member of the World Bank Group, is promoting increased participation of women in Africa’s private sector, helping them overcome long-standing barriers that prevent them from starting businesses or gaining employment opportunities open to their male counterparts.As part of this effort, IFC hosted an Africa Gender Forum in Addis Ababa that brought together more than 50 women leaders, IFC clients, members of civil society, and development partners to discuss best practices and challenges to scaling successful approaches. Discussions also focused on ways to increase access to training and finance for women entrepreneurs, who own or partially own only about one third of Africa’s smaller businesses. “Women's economic empowerment is essential to achieving sustainable economic growth and poverty reduction. When women entrepreneurs are supported with loans and new skills, they are able to turn their ideas into small and medium-sized businesses that generate economic benefits for their families and communities. An investment in women is an investment in the community,” said David Usher, Canadian Ambassador to Ethiopia.“IFC recognizes the need to tap the vast potential of women as drivers of inclusive economic growth and shared prosperity, and has made gender one of its cross-cutting strategic priorities. We need to support and harness the positive effect that women’s economic empowerment and leadership can have on our economy,” said Adamou Labara, IFC Resident Representative in Ethiopia.A recently-published IFC report, ‘Investing in Women’s Employment – Good for Business, Good for Development’, found that investing in women’s employment and improved working conditions can bring dramatic benefits to both women and businesses. IFC also runs a number of programs that promote increased participation of women in business, including Women in Business which has helped over 3,000 African women entrepreneurs gain access to $27.5 million in financing. During the Gender Forum, several women spoke of how they or their employers are helping women gain a foothold in the private sector. One female business owner, Constance Swaniker, explained how she benefited from a collateral lending system IFC helped establish in Ghana. She said that the registry allowed her to use her machinery to access finance, which helped her create 50 new jobs. Brenda Achieng, Legal and HR Director of Finlays Kenya, a horticulture company, highlighted Finlays strategic approach to promoting greater gender equality among its employees. Finlays achieved cultural change in the workplace by developing clear policies, training for supervisors, vocational health and safety training and support from senior management.For more information, visit www.ifc.org

Istanbul, Turkey, November 11, 2013 — IFC, a member of the World Bank Group, is providing a $35.5 million loan to Elif Plastik, Turkey’s largest supplier of flexible plastic packaging, helping the company expand into Egypt, creating jobs, improving local know-how, and bolstering supply chains.The investment will help the company, which makes flexible plastic packaging for consumer goods like food, cleaning materials, and personal hygiene products, build a modern factory in Egypt. Some $15.5 million of the loan will go toward the plant, Elif Plastik’s first international expansion, while $20 million will help fund the company’s operations. The new plant will be able to produce 15,000 tons of flexible plastic packaging annually.

"We plan to expand into Egypt and other countries in the Middle East, and make the new plant a hub for Elif Plastik’s operations in the region," said Selcuk Yarangümelioğlu, Managing Director of Elif Plastik. "We look forward to developing a long-term partnership with IFC to further expand in the region and increase our company’s competitiveness."The investment is part of a wider IFC effort to encourage economic development in Egypt by supporting the country’s private sector and to support leading regional companies as they expand into Egypt, helping to create jobs and to strengthen the country’s economic integration with Europe, and the rest of the Middle East and North Africa.“This investment fits with our strategy of boosting confidence in Egypt's private sector, a major contributor to employment,” said Nada Shousha, IFC Country Manager for Egypt. “At the same time we are helping a Turkish company expand in the region, promoting cross-border investment between developing economies."During fiscal year 2013, IFC committed $276 million in Egypt across five projects. That brought IFC's total commitments since 2011 close to $1 billion, including $303 million mobilized from other investors.IFC has been investing in Turkey’s private sector for nearly 50 years. In fiscal year 2013, IFC delivered a record$985 million in 20 projects, supporting smaller businesses, renewable energy projects, energy efficiency, energy security, healthcare, education, infrastructure development, and cross-border trade. For more information, visit:www.ifc.org.www.elifplastik.com.tr

Rabat, Morocco, November 12, 2013—IFC, a member of the World Bank Group, is making an equity investment in Zalagh Holding, a leading grain trading and poultry group, to help create jobs and encourage economic development in rural Morocco.

IFC’s $24 million investment in Zalagh will support the company as it expands and creates new jobs, including those for women. The expansion will also help generate indirect employment in rural areas, where Zalagh is a key economic player.

"This agreement will support our strategy to become a major player in a rapidly expanding sector and strengthen our integrated value chain,” said Ali Berbich, Chairman of the Management Board of Zalagh Holding. “As well, IFC will bring with it its agribusiness expertise and its extensive experience in optimizing corporate governance and institutionalizing family businesses.”

This investment is part of the IFC strategy in Morocco to support the manufacturing and agribusiness sectors.

"Supporting the development of Zalagh Holding is part of our effort to spur job creation and promote sustainable growth in rural areas of Morocco,” said Guy Ellena, Director of IFC’s Manufacturing, Agribusiness and Services Department in Eastern and Southern Europe, Central Asia, the Middle-East, and North Africa. “We are excited to partner with a company with such an extensive experience and a reputation for supporting communities.”

The project will also support the growth of the poultry industry and promote the use of top-notch environmental and health standards.

Zalagh Holding is embarking on an ambitious 350 million Moroccan dirham expansion over the next three years. It is planning to ramp up production of animal feed, increase its supply of chickens and turkeys, and build poultry farms across the country.

Thursday, October 24, 2013

The 10th IMN South African and African Capital
Markets Conference attracted over 600 delegates from across the globe in on the 22nd of November 2012. Converging
at the Westin Grand in Cape Town, were the brains and pockets behind chiseling into shape, Africa’s capital
markets which for decades have remained generally untapped.

“There has been strong development of local currency debt
capital markets in many countries in
Africa as well as unprecedented interest by offshore investors for African
credit risk as they turn away from near zero interest rates environments in the
developed world and search for yields elsewhere.” Megan McDonald, Head - Debt Primary Markets, Standard Bank

Around this period
last year, the word on issuers, bankers and investors' lips what “Eurobond”. The
IMN Conference coincidentally fell just about two months after the historic Zambian
sovereign Eurobond. A USD denominated 10
year bond which raised $750million and was oversubscribed resulting in an
order book value of $12billion. Excitement at the prospect of more sovereign and
corporate issuances in Namibia, South Africa, Angola and Nigeria was in the air.

Fast-forward, one year later, the IMN conference goes into
its 11th year. Taking a look back at the past 12 months, economic tremors of varying
magnitudes have swept the globe but Africa continues to register growth.
Critics would render Africa’s growth story nothing to write home about but with
liquidity in the capital markets seeking crevices through which to match
assets, Africa is on track to catch up with the rest of the world.

Marking the beginning of the 10th IMN conference
for emerging markets in Africa questions that lingered above the meeting revolved around:

·Africa’s institutional capacity

·Underdeveloped markets with relatively undeveloped yield curves

·High interest rates – a deterrent of poverty eradication

In a week, a wider pool of delegates will
converge in Cape Town to behold and review the progress made over the past
twelve months and project into the future.

·Are Africa’s capital markets developing too
quick too soon?

·Is Africa transformed institutionally to make
current and future investments worthwhile for investors?

·If Africa has seen inflows of funds in other
forms and failed to realise tangible growth over the decades, will the story
change now?

·With many African countries healing from the
debt burden lifted under the HIPC debt review initiative, is Africa ready to take on more debt?

·Africa needs approximately $100billion worth of
investment per annum to develop her infrastructure, are capital markets the only solution?

These are questions I hope we can all explore
as we take a close look at financing Africa’s development at The 11th Annual South African & African
Capital Markets Conference.

Thursday, October 10, 2013

DuPont says that Sustainability can be the
defining feature of Africa’s growth

Continent well positioned to address the sustainable
growth challenge

16 July 2013,
Johannesburg: African companies now recognise the
importance of sustainability as a strategic imperative, although many still
battle with implementing a comprehensive solution. This is the view of
Antoinette Du Randt, Regional Director, DuPont Sustainable Solutions, the
operations management consulting firm of the science company.

Du Randt says
“after grappling with sustainability for many years, starting with how to
define sustainability, there is now raised awareness about the need to
continually think about keeping a business sustainable for the long term”. Du
Randt ranks sustainability as a key challenge for corporations in the 21stcentury and she equates it to the
modern assessment of business performance.

“A key
element of sustainability is the creation of social value,” says Du Randt, who
points out that companies are under pressure to not only deliver profits for
shareholders, particularly evident in mining companies, but also to deliver
higher value to government through increased taxes and royalties, as well as
communities where they operate, who are looking for employment opportunities
and improved facilities.

Sustainability can
also become the defining feature of Africa’s growth in the decades ahead,
helping the continent overcome the “growth at all costs” trap that has
afflicted other countries in the past, whose economic growth has sometimes been
accompanied by high social and environmental costs.

Africa has changed
for the better, moving from economic stagnation to being home to seven of the
ten fastest growing economies, according to The Economist. This growth has
helped build a burgeoning middle class, which has spurred demand for goods and
services.

But for Africa to
truly realise its potential it will need to diversify its economy, encourage
movement to high value manufacturing and facilitate beneficiation of its vast
minerals. Putting in place robust sustainable development strategies will help
the continent achieve inclusive growth without damaging the environment or
harming the long term use of fresh water resources and agricultural output.

Du Randt points
out that DuPont sees sustainability as part of the evolution of the business
model and is a goal that companies have to pursue in collaboration with
government, labour and communities. Du Randt believes that sustainability is no
longer a function of corporate responsibility or compliance, but rather a key
growth opportunity that differentiates a company from its competition. “For
companies to thrive, the communities they operate in must thrive,”

Du Randt says as
with any other business objective, sustainability needs to be driven from the
top of the organisation with a clearly defined set of goals, a buy in from all
employees and leadership from board and executive level.

Du Randt points
out that companies need a change in mind set and view sustainability as “going
beyond corporate social responsibility” to create sustainable shared value for
all stakeholders as a strategic imperative.

Sustainability can
deliver commercial benefits. Between 1990 and 2004, DuPont estimates that it
reduced its greenhouse gas emissions by 72% and has generated $ 10 billion in
revenue from products based on non depletable resources.

She also argues
that stakeholders need to have realistic expectations from sustainability and
that stakeholder education and inclusion is important.

Du Randt argues
that the best way for companies to achieve sustainability is to invest in
innovation that improves all aspects of business performance, whether its
improvement in production while reducing water and energy consumption or by
defining market facing goals which deliver product innovation that reduces the
environmental footprint throughout the value chain while providing tangible
consumer benefits

There is also
emerging debate whether companies should be provided with incentives, including
financial incentives, to pursue sustainable practices. Du Randt points out
those financial incentives are likely to have a limited impact and the
companies should pursue sustainability for their own long term interests.

Du Randt also
argued that there are already incentives such as tax breaks in place and the
ultimate incentive for any company is increased and sustained profitability,
gained through an integrated strategy informed by shared value creation and
capture.

Du Randt concludes
by noting that as external pressures continue to mount, improved sustainability
performance is no longer optional, shareholders and stakeholders expect
companies to reduce their environmental foot print.

As companies search
for opportunities on the African continent and exploit its resources, they
should use innovation and a robust sustainable culture to drive improvement.

Friday, June 14, 2013

No small scale mining for foreign nationals in Ghana

Ghana, formerly known as the
Gold Coast has been a major supplier of gold to world commodity markets. After South Africa, Ghana is the largest
supplier of gold out of Africa and political stability has made the country an
attractive investment destination. The gold rush has not been without its fair
share of irregularities. Recent weeks have seen Ghana’s gold industry
overshadowed by the arrest of over 100 illegal Chinese gold miners among other
nationalities.

According to Kofi Bentil,
Vice President of local think tank, IMANI Ghana, the miners were rounded up for
breaking the law not on the basis of their nationality.

“Firstly on breaking
immigration laws, secondly for working in the country without relevant permits,
thirdly for operating in an area specifically reserved for Ghanaians and
fourthly they have done acts which have destroyed the environment in Ghana.
Because of these acts they are either being processed for repatriation to China or
for prosecution in Ghana”

The miners are currently out
on bail and some are in the process of being repatriated to China.

Former illegal mining sites
are often characterised by land that is beyond rehabilitation due to the
extent of the damage. The abandoned open mine shafts have collected water and
become breeding ground for parasites. The irresponsible mining operations also
caused the contamination of drinking water sources in communities where access to safe water was already a challenge.

Though there has been outcry
over the unfair treatment of the Chinese miners, Ghanaians who conduct mining
without the necessary permits or cause environmental damage would be
prosecuted in the same manner. Mr Bentil believes the small scale mining sector
in Ghana will not grow in the foreseeable future if government is not at the
forefront of empowering Ghanaians with the ability to defend what is rightfully
theirs.

However, the Chinese miners
in question acquired the land they were operating on from Ghanaians who either
sold their mining concessions in full or in part. This is due to either the
lack of interest in mining on the part of Ghanaians or the need for
quick returns.

Mr Bentil says, “any individual, Ghanaian or foreign who
operates outside the stipulated mining policy and breaks the law in any way,
will be equally prosecuted.”

“The Ghanaian policy on
small scale mining clearly states that no foreign national may conduct artisanal mining under any circumstances. Even if these Chinese regularize their stay in
Ghana and gain work permits, they will not be allowed to own any small scale
mining permit and licenses. The only way they can get involved in small scale mining is if they are employed by a Ghanaian small scale miner.”
Mr Bentil reiterated.

“The capital intensive
nature of mining is of no importance in small scale mining. All you need is a
shovel and you can operate a small mine,” said Mr Bentil when asked what
government and financial institutions were doing to avail capital to turn small
scale mines into lucrative operations.

The impact of artisanal
mining in Ghana is said to be quite significant. For every direct job in
mining, about 10 others are created in side stream activities. Small scale
mining contributed 9% of total gold production in 2000 and by 2010 the
contribution had risen to 23%, with over a million Ghanaians directly dependent
on ASM for their livelihoods.

Tuesday, May 14, 2013

88mph opens applications in Nairobi

08.05.2013, Nairobi, Kenya

88mph, an early stage startup fund and
3 month accelerator program has opened applications for Nairobi. The program
assists start-ups by giving them investment of up to a 100k, access to business
networks and the know how to quickly grow their businesses. 88mph’s strategy in
Africa is to fund strong teams and web-mobile ideas that have the ability to
scale across English speaking Africa.

“There’s an immense opportunity to
build mobile/web startups in Nairobi right now. African Mobile/web is hands
down one of the fastest growing markets in the world and we want to reach out
to entrepreneurs who build products and services for hundreds of million
mobile/web users that are rapidly popping up on the continent,” says 88mph
Program Director Nikolai Barnwell.

Barnwell continues,“Unfortunately, the
natural course of a startup is to die before succeeding. But we provide the
funding and the infrastructure to boost the odds of survival and we now want to
look for the next batch of future successful entrepreneurs.”

That’s why, in addition to funding, the
88mph team in Nairobi has put together talent and resources, to add more value
for the startups:

A partnership with
Google has enabled the right space and internet resources to build tech
companies, as well as access to Google’s experienced web professionals who
can mentor the startups.

A host of highly
experienced local Kenyans and global mentors have been added to the
already top-notch 88mph mentor network.

Furthermore,
“Entrepreneurs-in-residence” – experienced entrepreneurs, specialized in sales,
programming & web design - are being brought in from across the world
to work side by side with the local startups during the 3-month
acceleration.

Finally, 88mph
arranges a demo day, where the startups will get access to a group
of investors and showcase what they’ve achieved so far.

Last year 88mph invested in 6
web-mobile startups in Nairobi. The 3-month program to accelerate the growth of
the startups in Nairobi last year has reaped great rewards for the start-ups,
with one startup with confirmed follow on funding and another two that are in
final discussions. This will allow them to be able to scale their businesses
across Africa successfully.

‘I've seen a wealth of talent infused in Nairobi
within the past couple of years," says Carey Eaton, co-Founder, One Africa
Media and CEO, Cheki Africa Media."88mph and the ecosystem brewing here
are making a very significant contribution to building technology companies in
the region to another level, building the next great wave of web and mobile
businesses that solve African problems. I'm looking forward to following these
startups closely throughout the program."

The speed at which the mobile internet
has reached the markets of Africa, now at 274 million Africans on Edge or 3G,
has created a huge demand for local applications and services catering to the
young and growing middle classes of Africa. 88mph is here to fund start-ups
wishing to grab a portion of this growing market. So far, they have invested
over $750,000 into 23 early stage start-ups.

The combination of a large market,
young population and opportunities within the mobile/web industry makes this
accelerator attractive to any tech entrepreneurs who are looking to solve real
challenges in Africa.

"Looking 2-5 years ahead, the US
and Europe will be stagnating at best. I think the biggest opportunities for
return on investment will be in Africa and other emerging markets. Our
accelerator program is a great opportunity for international tech entrepreneurs
and returning diaspora to come, take advantage of the insane growth here, and
work on solving some really interesting problems," concludes Barnwell.

Ends.

Additional Information:

• Application deadline is midnight July
15th, 2013

• Startups can apply now on 88mph.ac

• 88mph invests up to $100k per startup

• Equity will depend on the startup
company valuations, which could range from $100k to $1mil

• Altogether 8 - 15 teams will receive
an investment and get accepted into the 3-month program

• The teams will be notiﬁed if they
have been accepted to the program by August 1st, 2013

• Program starts on August 26th
at the 88mph Garage in Narobi, Kenya

• Startups in the program will have
access to tech hubs in Cape Town, as well as to 88mph's partner tech hubs
across Africa

CAPE TOWN, South Africa, May 13, 2013 – DuPont Photovoltaic
Solutions (DuPont) will be exhibiting at African Utility Week 2013, May 14 – 15
in Cape Town, South Africa, showcasing technologies designed to improve the
efficiency and lifetime of solar panels and lower overall system costs.
Dr. Stephan Padlewski, marketing manager for the Europe, Middle East &
Africa (EMEA) region also will be a featured speaker at the co-located Clean
Power Africa Conference on Wednesday, May 15th, emphasizing the
importance of materials to help ensure long term reliability, a lower levelized
cost of electricity and improved investment returns for solar energy
systems. Visitors to the show can visit DuPont in Hall 1, booth S02.

“It is not enough to know who makes the solar panels you buy, you have to know
what is in them to understand if they will deliver the required power output
over their expected 25 year lifespan,” said Padlewski. “One of the key
challenges for the solar industry is how to lower overall system costs to make
solar energy more competitive with other power sources, without compromising
performance. This is where materials matter - they have a major impact on
system performance and return on investments solar.”

DuPont will highlight key materials, including:

DuPont™
Solamet®photovoltaic
metallization pastes, that have doubled solar cell efficiency over the
last 12 years.

DuPont™
Tedlar®polyvinyl
fluoride (PVF) films that provide 30 years of proven durability and
reliability for solar panels exposed to the harshest outdoor conditions.

Lightweight photovoltaic system solutions that are lightweight and
easy to install, designed to reduce balance of system costs.

DuPont Photovoltaic Solutions is the leading global supplier of
specialty materials to the photovoltaic industry. To learn more, please
visithttp://photovoltaics.dupont.com.

DuPont (NYSE: DD) has been bringing world-class science and
engineering to the global marketplace in the form of innovative products,
materials, and services since 1802. The company believes that by
collaborating with customers, governments, NGOs, and thought leaders we can
help find solutions to such global challenges as providing enough healthy food
for people everywhere, decreasing dependence on fossil fuels, and protecting
life and the environment.

Thursday, April 11, 2013

The future of mining
in Senegal

The mining industry of Senegal has been dormant for the greater part of
the 20th century. From the 1960s to 2000, the extraction of
phosphate was the major earner of revenue in mining. In 2005, the mining
sector of Senegal expanded to encompass the exploration of base metals such as
iron ore. At present, Senegal boasts of the 3rd largest heavy
mineral sands deposit with a major operation which commenced December
13, 2012.

Major discoveries of gold, copper and cobalt deposits have
been made in recent years. Mr Ousmane Cisse, the Senegalese Director of Mines and Geology explained that gold
deposits have been discovered in Kedugu, located in the eastern part of
Senegal.

Senegal is home to regional headquarters to a number of
multinational corporations due to its well developed infrastructure as well as
political stability. “Senegal is the jewel of West Africa, it is the most
stable country in the region and have many companies with their headquarters
here even thought they don’t operate out of Senegal”, Mr Cisse reiterated.

“A Social Mining Programme was set up in 2008 in conjunction
with the World Bank to encourage the move from social to economically viable
mining for local small scale miners. This programme has empowered miners to
generate revenue by equipping them with the necessary skills to mine
efficiently,” said Mr Cisse

Senegalese President, Macky Sall

The future of mining in Senegal certainly looks bright and
is set to contribute significantly to GDP growth as well as socio-economic
development by 2017-2020.

“The iron ore deposits in Senegal are linked to large
infrastructure development projects such as the development of 400km of
railroad as well as the reconstruction of 350km more. There will also be a new
harbor to be constructed for the transportation minerals to exports markets. Furthermore,
railways from mines across the country to the existing port of Darkar are in
the pipeline”, said Mr Cisse.

In order to encourage foreign and local investment into the
mining sector, the government of Senegal is in the process of setting up a
mining consortium to promote the issuing of exploration licenses. The arm of
government will aim to minimize bureaucracy in the acquisition of information
related to the mining industry in order to create a conducive environment for investors.

The government of Senegal is also promoting the value
addition of minerals within the country with the aim of creating employment and
generating business for small businesses offering services to the mining
industry. This will also promote growth in other economic sectors such as
agriculture where minerals such as phosphate are consumed.

Tuesday, March 5, 2013

Where
is Africa when Africa is being discussed?

When the who ’s who of mining converge, one
can expect nothing less than the finest thought provoking and somewhat mind-boggling numbers to be shared. The Investing in African Mining Indaba 2013
was no exception, attracting leaders from various facets of the mining industry
from all corners of the globe. Africa, the new frontier of the 21st
century, is set to become the largest supplier of precious minerals, base
metals and chemical minerals in the future. If current trends continue, Africa
could be supplying 50 - 75% of the world’s minerals as the developed world experiences
depletion in their own mineral resources. While many perceive Africa’s embryonic
stage of economic development as an obstacle, the business world sees this as
an opportune time to scramble for Africa yet
again. The acquisition of assets at this stage is much more cost effective for
those in positions to acquire funding and finance operations across all
sectors.

While foreign investment is vital for the
development of the mining sector, it comes with adverse effects that may see
African economies further plagued with issues of lopsided distribution of
income and neo-colonialism. Mining companies which presented white papers,
among them Rio Tinto, Anglo American, Lonmin and other large corporations with
operations in various parts of Africa, divulged current and future plans to
bring about social development. It seems mining companies are of the standpoint
that enough is being done to give back to the mining communities in which they
operate while a prominent executive went on to say, “ governments often ask for
more than they are willing to give…”

The extent to which this statement holds
water may be debatable but the vital question that remains unanswered is “To
what proportion do social development projects equate to the value of mineral
resources mining companies stand to gain?” Taking into account the capital
intensive business that mining is, it can be understood that miners should have
room to somewhat dictate the terms. However, left in the bank, would the large
amounts of money yield much without assets such as the rich mines of Africa to generate profit?

The debate of sustainable development rages
on, perhaps a one sided one, as there seemed to be a bias towards those who
have the voices to speak at such forums as the Mining Indaba. The consensus
among speakers was to engage all stakeholders in mapping the way forward for
African mining, yet sadly, all stakeholders were not well represented.

It may be easy to berate tales of injustice
and negate the good that mining has contributed to Africa through backward
looking but if Africa is to truly benefit from the vast resources she boasts
of, a number of things need to be put in place. While this is not an antidote
to the problem of Africa’s poverty, it may very well be one of the many steps
to making Africa at large experience more economic growth.

Easy access to information on opportunities available in mining

Educate local communities on the various facets of mining to
encourage participation

Develop local and regional capital markets to encourage the
participation of local junior miners to venture into the industry

Education from the grassroots level of the geography and needs
of Africa in order to foster innovative thinking

BUILDING MINING INDUSTRIES OF THE 21ST
CENTURY: CAN WE GROW ECONOMIES BEYOND TRIPPINGS OF THE DUTCH DISEASE?

Cape Town, 6/2/2013

INTRODUCTION

Good morning distinguished
guests, ladies and gentlemen. These are difficult times to be in the mining
industry – even more so than a year ago when I first addressed you at the
Mining Indaba. At that time the mining sector was already in the midst of the rising
tide of resource nationalism and anti-mining sentiment. That sentiment has
grown stronger world-wide. In South Africa, my beloved country, the legacy of
the past has come home to haunt us in the tragedy that is Marikana and many
other violent incidents that have come to characterise conflicts over scarce
resources in our social relationships.

The benefits of high levels
of mineral resources have in many cases across the world tended not to benefit
the majority of citizens. There are exceptions. The Peruvian government
ring-fences royalty payments for mining communities and spends the money there,
while the way Norway manages its oil revenues is probably the closest we get to
an ideal model. The Norwegian government only uses four percent of its oil
revenues on expenditure, and the rest is invested in Norway’s Petroleum Savings
Fund, focussing largely on investments to develop other sectors of the economy.
Unfortunately these are exceptions and for the most, mining tax revenues vanish
in the black hole that is the central fiscus and end up funding large rural
estates for presidents.

Today I would like to take
you on a journey of imagining a global mining industry that operates on a
completely different model. I would like us to imagine a mining industry of the
21st century that is both a catalyst and an engine of growth in both
advanced and emerging economies. I would like to borrow the words of a friend
and colleague, Gunter Pauli:

“Countries with rich
mineral reserves and part of broad free trade zones are particularly affected
by the globalized economy, where increased demand for raw materials pushes up
commodity prices, which increase export revenues that strengthen the local
currency against the dollar. A strong local currency driven by ore exports and
direct foreign investments turn imports cheaper. This leads to a
de-industrialization, or the impossibility to ever build an industry, and
adversely affects agriculture that is dependent on overseas markets. This
phenomenon is known as the “Dutch Disease”. It affects large commodity
exporting nations like Colombia. (I must add South Africa at the top of the
list).

The only way to respond to
these adverse macro-economic effects of commodity driven export strategies is
to change the business model of the mining industry. Evolving mining from a
core business, focused on the extraction of ores and the export thereof to a
clustering of mining, agriculture and manufacturing using all available
resources of the mine, from land to energy and waste like rock refuse and
tailings. The design of a positive response strategy to social challenges like
artisanal mining, combined with securing a cluster of businesses around mining
could reverse de-industrialization. Better, this could create an economy that
remains vibrant after the mining operation have exhausted their resources. At
first sight, the process of clustering industries and social needs have no
relation. However this proven strategy that is now subscribed to by leading
global corporations adds value and jobs, while strengthening each competitive
position in every core business generating growth in the country.”[1]

My presentation today is
intended to start the difficult conversations that are essential to such a
re-structuring process in the mining industry. We often avoid difficult
conversations because we believe that the business of business, as one CEO told
me a fortnight ago, is to make money regardless of the socio-political
environment. The reality is that in the 21st century the
inter-connected nature of economics, social and political systems, fuelled by
rapid information technology knowledge and information dissemination, makes
such a simplistic business approach unsustainable.

I will sketch what in my
view are the key issues that the mining industry, governments and other
regulators, workers representatives and unions as well as citizens in general
should be discussing as a matter of urgency to set a new sustainable foundation
for mining. The key issues are:

-
How does one build a mine in the 21st century to ensure that the
benefits and risks of exploiting the resource base are shared more equitably by
all stakeholders?

-
How does one deal with legacy issues of old mine operations in a manner that
enables fair co-ownership of the risks and rewards in a sustainable model?

-
What needs to change in the framing of the paradigm of sustainable mining
within a greater focus on sustainable economies and socio-political systems?

These difficult
conversations have to be held in an atmosphere of candour, mutual respect and a
focus on the common good for each country. Governments need to listen very
carefully to mining houses and the industry as a whole. Of course when
governments are truly representative and accountable to all the people, it
needs to be a two-way street, and the mining industry needs to listen to them
as well. But it is not helpful to imagine that governments are the only
credible representatives of public good interests. Modesty on the part of
governments is essential to minimize the risks of conflating governing party
interests, government’s role as a regulator and the state as the custodian of
inter-generational long-term interests of the society as a whole.

The private sector must
confidently voice its views within the broad rubric of its accountability to
its shareholders whilst mindful of the shared long-term interests of sustaining
the industry in the challenging environment of the 21st century.
Silence in the face of abuse of power on the part of governments tends to come
back to haunt industry players.

The workers and their
representatives need to take a longer term view beyond annual wage increases.
Issues of productivity, use of technology and innovative business models
require openness to new opportunities. Defending existing jobs may ultimately
be to the detriment of sustaining the industry with new types of jobs yet to be
experimented with. Unions should be at the forefront of promoting innovation
and productivity as the surest guarantors of sustainable rewarding jobs. The
imperative of creating new types of jobs and livelihoods needs to be at the
forefront of all the parties to conversations about sustainability. Union
leadership is critical in forging partnerships that benefit society including
future generations.

TOWARDS
BUILDING 21ST CENTURY MINES

The extractive mining
industry models that have characterized mining in most countries of the world
over the last centuries are being challenged on many fronts. The idea that
economic and political elites can continue to capture the benefits of mineral
and natural resources is not only morally wrong but bound to lead to civil
conflict which is bad for everyone including business. Extractive industry
modes are by their nature unsustainable given their failure to invest in
innovation and creativity to enlarge the resource base and to allow new
entrants to bring renewal to the industry. Instead, mining has more often than
not relied on monopolistic business models that keep new entrants out thus
limiting the possibility of new ideas.

Elite pacts that have
underpinned most mining licence agreements across the globe are being
challenged by local communities and civil society actors. Greater transparency
is being demanded about the nature of the agreements, benefit sharing
arrangements, environmental impact assessments and management of the mining
footprints on ecological systems.

The proverbial resource
curse has continued to plague most emerging economies where political elites
are seen to be the sole beneficiaries of non-transparent licensing arrangements
with industry players. Extractive industry approaches are often inextricably
linked to extractive political systems driven by patronage networks that take
home the greatest spoils. In such circumstances higher royalties and taxes do
not necessarily benefit ordinary citizens who continue to live in grinding
poverty. Post-colonial Africa has more than its fair share of countries caught
up in the vicious cycle of the extractive industry mode in mining and other
natural resources. Nigeria, Democratic Republic of the Congo, Angola and now
increasingly my own South Africa are showing signs and symptoms of the resource
curse.

Inclusive economic and
political systems focus on institutions that emphasise meritocracy and promote
the contributions of the best talents and creativity of their citizens to
increase productivity and generate a sense of shared value in resources.
Unfortunately, South Africa has sustained an extractive economic system that
started with mining and energy companies, but now includes monopolies in many
other sectors including many serviced by large and powerful – and not necessary
– very efficient parastatals.

The experience of the black
economic empowerment programme demonstrates how this extractive economic system
has seduced new black elites to become part of the closed patronage system.
Very few BEE deals have really achieved what they set out to do – namely
empower the many and not the few. If we could go back to the drawing board I
would make employees the largest beneficiaries together with neighbouring
communities as well as communities in labour sending areas that provide the
mines with their manpower.

South Africa is also
increasingly finding itself in a very difficult position that reflects all the
symptoms of the Dutch Disease. The huge export revenues we enjoyed at the top
of the resource super cycle pushed up our exchange rate and rendered our
agriculture, textile and other industrial sectors increasingly uncompetitive.
The failure of successive post-apartheid governments to invest in, and manage
the creation of high quality education and training systems to enhance
productivity, has led to a classical unsustainable economic base.

The shrinking economic cake
alongside the rising tide of higher expectations that freedom would deliver
better material conditions has raised the risk profile of the country. The
tragic events in Marikana and protests by agricultural sector workers in the
fruit and wine farms in De Doorns in the Western Cape are a wake-up call
alerting South Africans to the many time bombs waiting to go off.

A turnaround is possible.
It must start with difficult conversations between leaders of the government,
mining industry, and worker representatives. The government must commit to
creating an environment of: policy certainty, higher quality physical and
social infrastructure, including education for the 21st century, and
transparent fair regulatory systems to enable investors to commit long-term
resources. The adoption of the first ever National Development Plan by the government
is a promising starting point. Success will depend on the implementation of the
commitments made to focus more intently on fighting poverty and creating a more
positive investment climate with appropriate incentives for both domestic and
international investors.

The mining houses and the
government must accept primary responsibility for addressing the legacy of the
extractive industry mode of mining: the triple burden of silicosis, HIV/AIDS,
acid mine drainage, dusty and uranium contaminated environments. Industry led
Public/Private Partnership arrangements must be struck to enable comprehensive
holistic solutions to emerge. Government must provide incentives for the mining
industry to invest in clean up operations which would also provide alternative
livelihoods and jobs for ex-mine workers and local communities. Investors would
also have to refocus their mindsets away from the short-termism that has driven
the extractive industry mode. There is an urgent need to re-align the time
horizons of expectations of high returns with the unavoidable longer term
horizons of the build up process of projects in this capital intensive
industry.

Workers representatives and
unions must shift their mindset from short-termism to focus more on sustainable
livelihoods and higher productivity to enhance returns for everyone. A greater
emphasis on demanding higher quality education and training as well as wellness
for their members should be the primary focus. Unions have dropped the ball
with respect of fighting for proper housing, promoting healthier families and
conducive environments for work-life balance for workers. The distance that has
developed between workers and their representatives is a key factor in the
recent wildcat strikes and tragedies in the mining industry in South Africa.
Union leaders are perceived to have become part of the elite with a focus on
consumption and status for themselves.

What this requires is that
companies continue to create shared value for communities, governments and
other key stakeholders in the areas they operate, building on what has already
been achieved.

This means that mining
houses must:

§ Build on sustainable local economic development
programmes

§ Enhance programs focused on the procurement of
local goods and services and promote responsible supply chain management

§ Work with government to ensure community
programmes align and support government development strategies

§ Develop sustainable community infrastructure and
other projects in collaboration with local communities, government and other
key stakeholders

§ Respect human rights

§ Monitor and optimise stakeholder engagement

Finally and perhaps most
critically we will all have to accept the fact that the traditional way of
mining in South Africa with its reliance on cheap, low-skilled and plentiful
labour is over. It is not sustainable. The labour-intensive nature of South
African mining has deterred investment and the longer government structures its
regulations around this model the longer investors will stay away.

HOW
DOES ONE ESCAPE THE TRAP AND BUILD THE FUTURE?

I would like to share
Gunter Pauli’s ideas informed by his work in Colombia which can be adapted to
any other country:

“This possible solution
operates within the free market philosophy. However, the future relies on a
fundamental change of the mining business model which evolves from a core
business centered around a core competence, to a clustering of activities that
exploits all available local resources, generating multiple benefits for the
mining companies, its industrial partners, the local communities and even the
environment. This clustered approach ensures that the Dutch Disease will not
smite the commodity trading countries. On the contrary, the design of a new
business model for mining ensures that the whole economy regains
competitiveness, including the farming and (manufacturing) industries which
have already faced a downturn.

Clustering
of Mining, Agriculture and Manufacturing Industry

A shift in the business
model for mining provides a chance to reverse this trend of deindustrialization
in commodity exporting countries. In order to accelerate its effectiveness, it
is ideally combined with a shift in taxation policies. As long as mining
companies remain core businesses focussed on extracting more ounces from the
Earth, and ship these out of the country at lower costs paying a fixed
percentage as tax to the government on each unit exported, then there is no
solution.

However, if we rethink the
activities of the extractive industries and how these could be redirected to
respond to both global and local demand, maintaining a focus on minerals, while
ensuring an effective use of all opportunities made possible by the mining boom,
then there is a future for agriculture and local industries. If the government
were to recognize the tremendous potential of this multiplier effect, then a
smart shift in taxation can steer mining towards the clustering of productive
activities. Mining and the commodity trade will then turn into a catalyst of
local economic development instead of being a cause of de-industrialization and
rural poverty.

Mining
and Basic Needs

Let us take a gold mine as
a case in point. Just about every goldmine in the world needs water to process
ore. Actually, most mines require water and seldom find abundance in their area
of influence. The traditional response of the mining engineers has been to pump
water from aquifers, to pipe water over long distances, or to install reverse
osmosis facilities if there is salt water in close proximity. These are major

infrastructural
adjustments, increasing both capital and operational expenses of the mine at a
cost of water per cubic meter that the local population would never be able to
afford.

Time
to think different. While not all regions in
the world can provide lasting solutions exactly like the one described below,
most mining zones can undergo a major regeneration of native vegetation, or a
reforestation in order to turn the hydrological cycles from excessive water
consumption by mines and perceived drought and contamination of water to
abundance of water for private, agricultural and industrial consumption. Since
five to eight years will span the discovery of a commodity to mine and its
commercial exploitation, there is enough time to reverse the water supply in
the region using all available resources.

Convert
Cost into Revenue

If we were only considering
the regeneration of forests for the purpose of water, then this represents a
cost. This still reduces capital and operational expenses of the mine, since
water production and filtration by a natural forest remains cheaper than
installing water catchment areas and water treatment systems. However in the
business philosophy of the Blue Economy, we are not only interested in merely
reducing expenses, we are keen on increasing revenues, not just for the company
concerned, but for the local economy. A mining project in the Colombian Andes
offers the opportunity to regenerate part of the bamboo forest that once
reigned the region. Bamboo, especially giant bamboo (Guadua angustifolia)
is well known for its capacity to regenerate water cycles, purifying
contaminated water, while regenerating top soil and increasing rainfall since a
bamboo cover of the land decreases the surface temperature and therefore
increases precipitation.

FROM
EXTRACTIVE TO INCLUSIVE MINING MODEL

My experience of growing up
in a rural area, operating as an activist in a hostile environment of the
apartheid regime and being a witness to, and participating in efforts to build
a post-apartheid inclusive society, has taught me that almost every challenge
can be turned into an opportunity for change. I have benefitted enormously from
turning the hardships of my life journey into learning opportunities. The
question for the mining industry today is how we are to turn the challenges we
face into opportunities for creative fresh starts?

The mining industry in
South Africa has no choice but to make a fresh start. Fortunately many are
already working together to develop alternative models to tackle common
problems such as the TB/Silica and HIV/AIDs Industry-led effort (The Chamber of
Mines with Gold Fields, Anglo Ashanti, and some platinum companies taking the
lead) supported by the National Department of Health and international
development partners. But much more boldness is needed to develop the
“clustering model” that Gunter Pauli refers to above.

Just imagine turning
Rustenburg, in North West Province, into a modern mining town with a cluster of
appropriate industries that form the supply chain of the platinum mines in the
area. Imagine the human and intellectual capital that can be generated through
the construction of both physical and social infrastructure to create a buzzing
town housing all levels of employees working on neighbouring mines and
industries. Imagine turning the ugly landscape of mining shafts into green
spaces that provide agri-business jobs for locals and feeds the households in
the area and beyond. Imagine the government, private sector and citizens
working together in a transparent way to build a sustainable future together.

But legacy issues in labour
sending areas have to also be addressed. Imagine the Eastern Cape and Kwa-Zulu
Natal becoming the bread baskets of the mining industry as part of its supply
chain for food and other agricultural inputs. Imagine the potential of
clustering agri-businesses in these provinces and enhancing the country’s food
security as well as its export potential. Gold Fields and Anglo Ashanti are
putting together just such an experiment with a chicken value chain in the
Eastern Cape. Imagine the growing social capital of rural areas that could
follow the termination of the destructive migrant labour model that has damaged
rural family life. Imagine the return of these provinces to proud producers of
high quality school graduates feeding into a rejuvenated higher education and
training system.

All this is possible, but
it will take a willingness to take risks and engage in tough conversations
between the government, private sector, workers and civil society. It is
possible to leverage the mineral resource wealth into a catalyst for
re-industrialization of our country, continent and other parts of the world.
But we must heed Einstein’s words – we cannot solve today’s problems by using
the same thinking that created them in the first instance. Are you ready for
change?